Saving Iceland

 

The deals on energy prices between Landsvirkjun (Iceland´s National Energy company) and the aluminum companies working in Iceland have been kept secret from the public since they got signed. The only notion the public had was a pamphlet called ”Lowest Energy Prices”, published in 1995 to lure heavy industry to the country, which like the name states, was filled with promises about cheap, greenwashed, energy. Looking at surrounding countries many estimated that the prices were close to a half of what households in Iceland pay. But after Alain Belda, Alcoa´s president, had the now famous slip of his tounge in Brazil that revealed that they were paying $15 for the MWh (megawatt hour), and RUV´s (Icelandic National Broadcasting Association) exposure of Century Aluminum´s prices earlier in the year, Landsvirkjun decided to open their books in, what they call ”an attempt to create peace around the company´s actions”. In reality they´re just blowing smoke in people faces with well chosen figures in a desperate attempt to save the companies already ruined credibility.

The Price Revealed
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Throughout the years, Saving Iceland has been pointing out that the common household on Iceland would end up paying the bill for the aluminium factories. The secrecy that shrouds the contracts between Landsvirkjun (the National Energy Company) and the aluminium companies shouts corruption and even more voices have been questioning the deals publicly and pressing on for those numbers to be revealed.

On the 9th of March, RUV (Icelandic National Broadcast Association) revealed a strictly confidential report the news channel has in their hands. The report, which was made for Norðurál (Century Aluminum) and foreign banks by the consulation office Hatch, shows the different costs of the industry, including the energy price.

That price of the KWh is bound to the price of each ton of aluminium, a 0.00000001% of the selling price. That means that while the price of aluminum was 1400$ a ton, Norðurál was paying 1,4 cents per KWh, making it the cheapest in Europe and leaving Landsvirkjun’s profit from the energy they sell to them dependant on the unstable aluminum price.
This price also means that Norðurál is paying a fourth of what aluminum companies in Europe are paying for their energy and on top of that, only a meager fifth of what the local population has to pay for their private energy usage.

Since the news came out, Landsvirkjun has announced they will be revealing their prices to the aluminium industry during the middle of next month.

Previously, Alain Belda, presdient of Alcoa, had revealed their energy bill in Iceland in a speech he held in Brazil. From figures he cited there people could calculate that it was the lowest energy price for an aluminium company anywhere in the world.

Keep checking this site for updates on these news.

From Amnesty International, February 2010

Plans to mine bauxite in the Niyamgiri Hills in the Indian state of Orissa threaten the very existence of the Dongria Kondh – an indigenous community that has lived on and around the hills for centuries.

The Dongria Kondh depend entirely on the hills for their food, water, livelihoods and cultural identity. They consider the Niyamgiri Hills as sacred.

The proposed mine could have grave repercussions for their human rights to water, food, health, work and other rights as an Indigenous community in respect of their traditional lands. International law requires that governments seek their free, prior informed consent before beginning such projects.

In Lanjigarh, at the foot of the Niyamgiri Hills, air and water pollution from an alumina refinery run by Vedanta Aluminium are threatening the health and well-being of local communities.

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Svandís Svavarsdóttir, Minister of Environment, recently declined land-use plans made by the parishes of Flóahreppur and Skeiða- and Gnúpverjahreppur at the request of Landsvirkjun (National Energy Company), which had also paid for the preperations to the changes in the plans. The minister declined the land-use plans on the grounds that according to Icelandic law, such plan changes are to be paid for by the communities themselves, and any third-party involvement in the costs is illegal.

Of course the governmental opposition parties and their usual gang of industrial lobbyists are furious over the ruling, and critisice it heavily, displaying reactions the environmental minister described as being similar to allergic reactions. Amongst other things they accuse her of hindering those who are trying to build up work in the energy and industry sectors and blocking the creation of new jobs in a country they claim is ravaged by unemployment (approximately 8,6% at last count).

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In September 2009, the Ministry of Environment overruled the Planning Agency’s verdic which stated that no joint Environmental Impact Assessment (EIA) is needed for the S-West Power Grid and the industry that it’s going to be providing for. The case was sent back to the Planning Agency for a more substansial treatment.

This ruling caused uproar amongst pro-indistrialists, who went so far as to claiming that Svandís Svavarsdóttir, the minister of environment, was guilty of both treason and terrorism against the people og Reykjanes, especially all the unemployed. All the medias jumped on the wagon with the industrialists, citing union bosses worrying about the unemployment rate, economists painting a bleak picture of a bankrupt future and interviews with unemplyed people worrying about their mortages. And all of it was Svandís’s fault.

Yesterday the Ministry of Environment confirmed the Planning Agency’s second verdict. The verdict’s the same, no joint EIA is needed for the projects on the SW peninsular. This means that all the balls are in the industrialists court now and the media is backing them up with quotes and interviews with indistrial workers and union bosses dreaming of a better future now that the way has been paved for projects like the enlargement of the Reykjanes Power Plant, Bitra Power Plant, Hverahlíða Power Plant, various data storages and an aluminium smelter and a silicon factory in Helguvík.

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The professional environmental saboteur, Friðrik Sophusson, former president of Landsvirkjun (Icelandic National Energy Company) and before that the financial minister under the Independent Party’s reign of terror, has now become head of the board of directors of Íslandsbanki, one of the government owned banks since the collapse of the bank system in 2008. The bank is now mostly in the hands of it’s creditors and the board of directors, which has been expanded to 7 members, are now mostly foreign experts in the financial sector.

Íslandsbanki also owns majority in the geothermal energy company Geysir Green Energy and controls all of it’s board members. Geysir Green Energy, in return, owns a majority stake in HS Orka (Southern Peninsula Geothermal Energy Company), or 57,4% stock after acquiring 34% stock from the municipality of Reykjanes Town and selling 8,6% to the Canadian Magma Energy Corp.

So Sophussons years in meddling with Icelands resources and energy companies are obviously far from over, and now he’s got his dirty fingers down in the money jar as well, where he can apply the needed pressure on these companies, owned by his bank, to further his dream of a totally harnessed Iceland.

by Aviva Imhof & Guy R. Lanza

Big dams have a serious record of social and environmental destruction, and there are many alternatives. So why are they still being built?

On a hot May day, a peasant farmer named Bounsouk looks out across the vast expanse of water before him, the 450-square-kilometer reservoir behind the new Nam Theun 2 dam in Laos. At the bottom of the reservoir is the land where he once lived, grew rice, grazed buffalo, and collected forest fruits, berries, and medicinal plants and spices. Now there is just water, water everywhere.

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Orkuveita Reykjavíkur (Reykjavík Energy Company) has lowered the value of a deed issued when Magma Energy bought the companies stocks in H.S. Orka (geothermal energy company). In a statement from OR it states that a lovering of the deed values was made to be in unison with international acounting standards.

Sigrún Elsa Smáradóttir, representative of the Social Democratic Union party in the board of OR announced that the estimated loss because of the stock trade is going to be 4 billion ISKR. There’s reason to believe that the value of the deeds Magma issued is overestimated as well, which will see even further loss come from the sale.

There was huge opposition against the sale from the start and the at the City Council meeting where the voting for the sale took place about 100 people demonstrated and shouted in protest from the balconies. Read more about this here and here.

The majority of the City Council spoke strongly for the sale and the profits that it would reap them, claiming the value to become 6.31 a stock. But the miniorities overlooked critique of the ridiculous loaning agreement has already proven to be true. The 3rd quarter accounts prove this and show that the stock value has fallen to 5.4.

By Indriði H. Þorláksson – Economist

The economic effects of heavy industry must take into account both short and long term economic policies.

Statements put forth without reasoning sometimes obtain more significance than they merit. Two such statements that are held aloft about the building of energy plants and heavy industry are particularly dangerous.

On the one hand that they are necessary and that they might even be the way out of the crisis and on the other that the future of the Icelandic economic system is best insured by utilizing energy resources and with heavy industry. One looks to the short term and the other to the long term but both are questionable, probably wrong and even dangerous.

The economic impact of heavy industry must take into account both short and long term economic policies, In the short term, say 3-5 years the goal is to restart the economy. In the long term the goal is to promote growth in the economic system to provide citizens with the good things in life. To do so the economy has to provide the highest augmented value to the nation for its work, capital and resources.

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Aluminium giant Alcoa continues to look into the financial prospects of building an aluminium smelter at Bakki outside of Húsavík though the Icelandic government has refused to extend their Statement of Will on the subject.

Tómas Már Sigurðsson, president of Alcoa in Iceland, says the project continues in cooperation with the energy companies and the local council of Norðurþing. They are now working on getting the Environmental Impact Assessment (EIA) done, which was ordered by the ministry of environment last summer. A suggestion for the assessment was given to the Office of the Icelandic National Planning Agency at the end of September this year. Tómas Már is hoping for the results of the assessment in the spring of 2010.

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